Basic Information

• A policy for builder's insurance typically provides coverage for all types of risks. These can include theft, vandalism, losses that are accidental as well as damage from natural causes that are not excluded in the policy. The property that is insured usually includes the building under construction, the building materials and any supplies.
  
  

Named Insured

• The named insured on the policy can be anyone who has an insurable interest in the property or building that is under construction. This can include the developer, property owner, building owner or, in some cases, the general contractor. The named insured is the one who will receive the policy benefits in the event of a loss.
  
  

Deductible

• The standard deductible for a builder's insurance policy is $500, but it can be as low as $250 or as high as $1,000 or more. The deductible usually applies only once per loss. This means that if multiple claims are filed for the same occurrence, a separate deductible will not need to be paid. The cost of the policy can be decreased when a higher deductible is selected.
  
  

Eligibility

• Depending on the insurance company, there might be eligibility requirements that need to be met. A basic builder's risk form can be used for building residential or commercial property that is less than $3 million in value. Builders working on the project might also need to have at least two or three years of experience.
  
  

Underwriting

• An insurance company will not issue a builder's insurance policy without first performing the required underwriting. Many underwriting guidelines include having prior approval for older buildings as a well as providing a photo of the structure. The building usually cannot be more than 25 to 30 percent complete before the effective date of the policy.